Friday, Mar 09, 2007
Interest rate predictions? Use the magic 8 ball
Firstrung: Interest rate freeze welcomed by property experts
Property experts have welcomed the interest rate freeze as 'good news' for the housing market. Far be it from us to consider ourselves 'experts' amongst such lofty company in such matters, although to be fair most market commentators may as well use a 'magic 8 ball' when making predictions as to future MPC decisions. However, whilst 'expert' opinion and imput is welcome, there is the rather obvious point that most have missed - which the Firstrung team feel compelled to highlight...
Posted by converted lurker @ 11:30 AM (822 views) Add Comment
13 Comments
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1. Si1 said...
All the 'experts' quoted are major vested interests - they're not experts at all, but estate agents etc!
2. Jolo said...
Whenever i read in the papers or see on the tv these so called experts, they have convinced themselves that lower interest rates are an advantage to FTB's giving us a chance to get on the ladder. Hiding the truth of the complete opposite. i'm sure they all belive that if interest rates kept rising house price's won't drop, how dumb are these people? i honestly don't know how long it will take but my opinon is that rates should not go lower for at least the next six months and if they do rise high enough then surley price's will start to drop.
3. C'mon Correction said...
Si1 - Yes, I agree, estate agents are salesmen nothing more. There have been many surveys done over the years and estate agents are generally regarded as one of the least trusted professions - why people digest their reports and take them as fact I'll never know?
People know what's at stake for the UK housing market, everyone deep down knows this market won't keep going forever. The majority own houses however and so don't want to beleive it, that's why they gobble up the endless property reports and take them as pure fact.
This is why we're the most indebted country in the world and our standard of living is plumetting through the world league tables. Sad, but true.
4. Steve said...
Interest rates will drop in order to keep the boom going.
The BoE does not have the balls to increase interest rates.
5. bidin'matime said...
David Bexon, managing director of SmartNewHomes.com:
"The Bank of England's announcement today that interest rates will be held at 5.25% will send waves of relief across the housing market."
Spin, spin, spin - they've actually said that they will rise, but they are keeping them at 5.25% for now...
6. rich said...
>> Steve said...
>> Interest rates will drop in order to keep the boom going.
>> The BoE does not have the balls to increase interest rates.
If HPI was the only factor then I'm sure you'd be right, but I'm under the impression that the resulting inflation would cause other effects such as currency devaluation.
7. C'mon Correction said...
Steve - things are a bit more complex than that mate. If BOE starting cutting rates then Sterling would drop heavily - we import more than we export so following sterling dropping, we would then have inflation shooting up as everything costs more.
So, no BOE can't drop rates, and are behind on rate rises. 2-3 years time we'll be up around the 7% mark.
8. p. o. o. r said...
The longer they keep interest rates on hold the more likely I see them later in the year having to take some drastic action, where we might even see some 0.5 percentage increases - The housing market around me seemed to slow before Xmas, which I was hoping was going to be a turning point, however in the last few weeks everything is selling again very quickly. I just do not know where the money is coming from - both myself and my wife earn good money, and we have a descent sized deposit, however there is no way that I am going to take out a massive mortgage just to get back on the property ladder again. Having sold last year I thought Xmas just gone was going to be the tunring point, however now I hate to say it, but I think it is not going to be until the end of this year or ealry next year until prices start to fall. So I have signed up for another year of renting, and will have to remain patient - watching and smiling when the news comes out about the debt problems people have and how they are all starting to lose their houses. The clock is ticking.... Next month I predict an increase as Council tax figures start to kick in. Mine have increase by 4.5%.
9. Steve said...
The Govt can manipulate inflation figures. We all know inflation is a lot higher than the 2.7% quoted but because the govt doesn't take into consideration certain things then it looks lower.
The housing crash is always another year away in predictions, this boom has gone on far too long now just to be a simple bubble. It is something much more significant like a real change in UK society.
10. Cwelsh said...
p.o.o.r I am in same position, just taking out an additional 6 months on my rental property.
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